Leon County v. FEDERAL HOUSING FINANCE AGENCY, 816 F. Supp. 2d 1205

FHFA is a federal agency with regulatory and conservatorship duties over Fannie Mae and Freddie Mac since 2008, with the Enterprises holding over five trillion dollars in real estate mortgages and related assets.
Leon County created the Leon County Energy Improvement District to operate a PACE program, funding home improvements with liens that can take priority over existing mortgages in Florida.
FHFA imposed restrictions on the Enterprises’ purchases of mortgages subordinate to PACE liens.
Leon County and the LEAP District sued FHFA and the Enterprises seeking injunctive and declaratory relief under the Administrative Procedure Act, the Tenth Amendment, and Florida Deceptive and Unfair Trade Practices Act.
Defendants moved to dismiss based, in part, on § 4617(f)’s limitation on judicial review of FHFA actions in its conservatorship role.
Key issue is whether FHFA’s challenged action was taken in its capacity as conservator rather than as regulator, affecting the court’s jurisdiction to grant relief.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FHFA acted as conservator or regulator	Leon County argues FHFA acted as regulator only.	FHFA acted as conservator in taking the challenged action.	FHFA acted as conservator for the challenged action.
Whether § 4617(f) bars judicial review of conservator actions	Plaintiffs seek review of FHFA actions, arguing review is available for regulatory actions.	§ 4617(f) bars any court action that restrains or affects conservator powers and functions.	§ 4617(f) bars review of FHFA’s conservatorship actions.
Whether FHFA could act in both regulator and conservator capacities	Actions attributed to FHFA were not simultaneously conservator actions.	FHFA can act in multiple capacities; later actions confirm conservatorship role.	FHFA can act in both capacities; conservator actions affirmed.
Whether the February 28, 2011 letter constitutes a conservator action	Letter is merely a litigating position and not a conservator action.	Letter directed continued actions and was an action of the conservator.	February 28 letter constitutes a conservator action.

Town of Babylon v. Fed. Hous. Fin. Agency, 790 F. Supp. 2d 47 (E.D.N.Y. 2011) (supports view that FHFA acts in conservatorship with broad powers)
Natural Resources Defense Council, Inc. v. Fed. Hous. Fin. Agency, 815 F. Supp. 2d 630 (S.D.N.Y. 2011) (upholds conservator action directing continued conservatorship rights)